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Technology Stocks : Ciena (CIEN) -- Ignore unavailable to you. Want to Upgrade?

To: joe who wrote (1999)	4/18/1998 1:12:00 AM
From: Dennis R. Duke	Read Replies (2) \| Respond to of 12623

I guess another explanation of Tuesday's run could be what UBS wrote in their report as follows: TELECOM EQUIPMENT NOTES 08:00am EDT 15-Apr-98 UBS Securities SUMMARY We are re-iterating our Buy rating on PairGain (PAIR-$20 7/8-Buy). We believe the recent weakness creates a good buying opportunity given our year end $25 price target and longer term $30 price target. We believe HDSL pricing has seen its worst days and the company is now in full swing in the PG-Flex/Plus product cycle. CIENA (CIEN-$46 1/2-Hold) was strong yesterday due to a more optimistic outlook for the current April quarter and perhaps some resumption of orders from WorldCom for the next quarter. Uniphase (UNPH-$44 3/4-Buy) was up in sympathy. HIGHLIGHTS * Strength in CIENA yesterday likely due to more optimism in the company achieving the April quarter results. Good order flow makes manufacturing the main risk for the current 2Q. Also, the resumption of some sales to WorldCom may be likely in 3Q which would be one quarter ahead of plan. Any sales, however, would be modest. Maintain Hold given valuation and need for better visility into AT&T spending plans. Uniphase was also strong following CIENA. [not sure what they are saying here?] ANALYSIS Quarterly Update On CIENA CIENA was up strong yesterday due to more optimism that the company will achieve current 2Q98 results. The company has had a good order flow in the second half of the quarter from its customers which provides better visibility into the current quarter. The main risk is more on the manufacturing side than on customer order flow. We continue to expect Sprint to be a significant customer in the quarter but contributions from Digital Teleport, Cable and Wireless and other DWDM customers as well as contributions from the Alta acquisition are providing the order flow. In addition, there is some chance that the company may resume some level of shipment to WorldCom in 3Q98 which would be one quarter ahead of schedule. Any such resumption, however, would probably be in the $10M-$20M range which is certainly an improvement from 2Q98 results but below the historic range of $50M+. We maintain our Hold rating on CIENA until we have more clarity on the situation at AT&T. I believe this jibes with the comments about the CFO being optimistic. Dennis